More opportunities for business to recover small debts and other important developments for business lawyers

BC business lawyers: We’ve released our latest business litigation highlights. A punctual briefing on B.C.’s new Civil Resolution Tribunal and appellate decisions on the law of rectification, adverse possession, and the constitutionality of CRA document demands. Invite us to present to your law firm in a Law Society approved CPD session: https://www.slideshare.net/ChilwinCheng/ascendion-2017-litigation-update-corporate-and-commercial-solicitors

 

Gina Lupino In The Hot Seat Podcast

Gina Lupino Talks Intellectual Property Law – In The Hot Seat Podcast

When it comes to Intellectual Property Law, there are a number of questions central to the topic. The most common question being: how does the process work? Here at Ascendion Law, we have your questions covered. Recently, Ascendion Law’s Gina Lupino shared her background and valuable insights on Intellectual Property Law and the art of being a businesswoman on Conny Millard’s podcast, In The Hot Seat.

In the podcast, Gina helps break down the ins and outs of Intellectual Property Law, providing user-friendly ways of distinguishing business versus product, corporate strategy, trademarks and registration.

Having had her start in mechanical engineering, it wasn’t until Gina was handed a patent from her professor that this area of study peaked her interest. She then started her research into patent law, which quickly turned Gina’s focus to Intellectual Property Law and we guess you could say the rest is history.

Gina plays an instrumental role at Ascendion Law in protecting your business assets and is often called upon to provide professional guidance through common law rights. As Gina explains in the blog post: “the minute you start caring about the way somebody uses your idea, that’s when you should seek counsel from an Intellectual Property Lawyer”.

At 36:15, Gina and Conny discuss the importance of being a woman in business, providing advice for young emerging businesswomen. In this part of the podcast, Gina highlights the self-awareness that comes from making the connection between gender and personal interests. Additionally, they touch on how we can avoid making assumptions based on one’s gender. The topic is something that is very relevant and therefore prevalent in current discourse taking place across a number of varying industries, including law.

Subsequently, the podcast broaches all facets of Intellectual Property with a minor focus on women in business that will get you thinking about business development in an in-depth fashion. We are excited to showcase Gina’s knowledge across Intellectual Property and hope you’ll enjoy the podcast as much as we did.

BC Court of Appeal Upholds BC Security Commission Multimillion Dollar Order + Penalty

BC Court of Appeal Upholds BC Security Commission Multimillion Dollar Order + Penalty

The Court of Appeal recently affirmed the BC Securities Commission’s decision to impose significant fines on a purported financial advisor selling exempt market products in Michaels v. British Columbia Securities Commission, 2016 BCCA 144. Michaels touted himself as a “Certified Senior Advisor”. However, he was not authorized to give advice about purchasing securities. Nonetheless, he made $5.8 million in commissions and marketing fees through advising almost 500 elderly clients. The Commission ordered that Michaels cease trading in securities and disgorge the $5.8 million. It also imposed a $17.5 million administration penalty, finding his misconduct severe and predatory. Michaels appealed the misrepresentation and fraud findings and argued that the Commission imposed an unreasonable penalty. He further explained that the Commission unlawfully convened two different panels to determine his liability and his penalty.

The Court of Appeal found that Michaels failed to address risks with his clients and exaggerated benefits. Disclaimers buried in the material he gave the clients did not change this fact. The Court of Appeal also found that Michaels based his entire business model on deceiving clients. He knew he was not acting in clients’ best interests. Each of the two Commission panels heard the matter they were deciding, and s. 6(2) of the Act empowers the Chair to refer the matter of penalty to the sanctions panel. The sanctions panel gave clear, principled and intelligible reasons for its administrative penalty, and the Court of Appeal upheld the panel’s decision.

This case does not create any new legal principle. It affirms the principle that the Court of Appeal will defer significantly to the findings of the Securities Commission. The case also confirms the standard practice that the Commission will decide questions of liability and sanction separately. One would argue that the hearing of both issues would cause greater unfairness to a respondent as it would force them to meet both issues simultaneously. However, the case is noteworthy because of the high financial penalty and disgorgement. In Ascendion Law’s model of BCSC penalties, the presence of this case creates some significant statistical movements to the data, causing modern average penalties imposed by the Commission to advance markedly higher.

Ascendion’s Debt Claim Checklist for Lenders and Creditors

Are you thinking of suing someone to recover a debt? Your lawyer will need certain documents to prepare the lawsuit.  Here is our checklist that we give the creditors, lenders, and plaintiffs who want to someone who owes them money.  Our clients use this checklist when they are owed money under a debt, loan, gift, or other contract:

https://ascendionlaw.zendesk.com/hc/en-us/articles/208319806-Common-Types-of-Documents-in-Debt-Claims

Naked put selling strategy backfires against sophisticated investor

Turkson v. TD Direct Investing, 2016 BCSC 732 is a very difficult case to read and track.  But, it is a rare reported decision on how the courts have treated naked put selling in an investor loss case.  For that reason alone, investment industry compliance officers should read it carefully.

The plaintiff in this case held an investment account with the defendant. The account included margin accounts with options trading and short-selling features. In 2014, the plaintiff wrote several put option contracts for hundreds of shares of publicly traded companies. Shortly thereafter one of the companies (GTAT) filed for creditor protection, and its share price fell significantly. The defendant found that the plaintiff had insufficient margin in his account and made a number of transactions to remedy this, including selling shares in the plaintiff’s account without notice. The defendant also assigned shares in the other company (IMMR) before the options’ expiry date. The plaintiff’s account lost value, and the defendant revoked his options trading privileges. The plaintiff brought an action on numerous grounds including breach of contract, negligence, breach of trust, and fraud.

At summary trial, the plaintiff argued that the IMMR options he wrote were European-style, so that they could only be exercised on their expiry date. The defendant responded that all exchange-traded equity options are American-style. The court accepted the defendant’s position. With respect to the GTAT options, the court found that when a stock is de-listed from an exchange and marked as involved in insolvency proceedings, nothing has changed with respect to the shares themselves. The plaintiff was still liable for the put option contracts he wrote. The plaintiff argued that the sale without his knowledge of some of his shares in order to meet his margin requirement was unlawful. The court found that the terms of the agreements the plaintiff executed with the defendant were a complete defence to this allegation. The plaintiff purported to understand the risks of trading, and should have been aware of the defendant’s rights under the agreements.

The reported reasons for decision are long, complicated, and technical.  The judge had to devote quite a bit of time discussing technical issues of whether this case was appropriate for a summary trial rather than dealing with the substance of the debate. The Plaintiff was self-represented, making it more difficult for the judge to focus on the main issues.  However, despite these challenges, compliance officers for dealers should review the decision as a rare example of the courts grappling with the risks of naked short selling investment strategies.

Contact us if you would like to discuss how this decision may affect you.

Rare CCAA and Novation Decision

The BC Court of Appeal recently considered a case involving a rare intersection of CCAA proceedings and novation.  Barafield Realty Ltd. v. Just Energy (B.C.) Limited Partnership,2015 BCCA 421.

Barafield entered five-year fixed rate contracts with CEG Energy Options for the provision of natural gas, for Barafield’s apartment buildings. The contracts gave Barafield the right to terminate in the event of default, including the insolvency of CEG, which went bankrupt. Just Energy purchased a portion of the contracts, which was approved by the Alberta Companies’ Creditors Arrangement Act (CCAA) court. When Barafield got notice of the purchase, it tried to terminate the contracts. Just Energy said the termination clause did not apply because the CCAA sale was permitted without Barafield’s consent. Barafield kept paying for natural gas while asserting its right to terminate. When the contracts’ term ended Barafield sued. The trial judge found Just Energy breached the contracts when it failed to get consent for their assignment. She did not address Barafield’s claim that it was entitled to succeed based on the doctrine of money had and received.

The Court of Appeal agreed with Just Energy that there was no privity of contract between it and Barafield, given that Barafield refused to consent to the assignment of the contracts, and there was no novation through the CCAA proceedings. The Court remitted the matter to the trial judge on the question of money had and received, as deciding this issue required factual findings on issues that the parties did not argue at trial.

The case affirms the principle that vesting orders and various orders issued by a court in a CCAA (and arguably any security enforcement proceeding) hearing does not create contractual obligations or other enforceable common law obligations between parties.  If parties intend for a court to impose such obligations in such a hearing, then parties should incorporate those terms into the court orders directly.

We are somewhat surprised in this case that the court remitted the “monies had and received argument”.  In our view, Barafield acted quite reasonably when it chose to continue paying for the natural gas while continuing to protest the obligation.  The result, in our view, would have caused the parties unnecessary commercial uncertainty.  That said, the result illustrates the importance of decisions by litigation counsel to advance certain claims over others within an action.

New Help Centre Articles: Sample Debt Claim, Forum Selection, and Prejudgment Garnishment

We’ve added new articles to our Help Centre. We’ve added some posts on how to draft a simple debt claim, a recent case comment on how courts will enforce foreign judgments, and a quick “how-to” article on pre-judgment garnishment.

Ascendion Law adopts new secure communications policy

security

Ascendion Law values its clients privacy and confidentiality.  Our clients know that we have built our firm’s infrastructure on a modern, web-based infrastructure.  To operate this infrastructure and ensure that we uphold our client’s confidentiality, we take seriously our role in handling private, sensitive, and confidential information.  We seek to maximize the benefits of operating an online infrastructure, while respecting the need to minimize the attendant risks.  To do that, Ascendion Law takes the following actions to protect our client’s confidentiality online:

  1. We will only use encrypted email to send most emails.
  2. To send significantly sensitive messages, we will send those messages only through secure communication portals.  We will not use email unless the client can assure us that they use encrypted email channels.
  3. We will send sensitive attachments only using encrypted and secure links to our secure content management service. We will not attach files to emails.
  4. If we conduct online research on sensitive topics, we will use the onion router networks to anonymize our traffic.
  5. We will use private networks only to access our office systems.
  6. We will only use information technology solutions that offer 256-bit online encryption access

We have incorporated these policies into our standard form engagement and into the way we serve our clients.  Click here to find out more about how we work with our clients.

More USPTO Cooperation

handshake
US Patent & Trademark Office (USPTO) director Michelle K. Lee continues on her quest to enhance patent cooperation between the USPTO and foreign patent offices. We can expect to see better, standardized classification from the European Patent Office (EPO), an increase in international prior art searches from the Intellectual Property Office of Singapore (IPOS), and more joint activities to improve operations and harmonization of patent application processing in the Intellectual Property Office of the Philippines. Stay tuned!